Bahamas - Performance Requirements and Investment Incentives Bahamas - Performance Requirements
The Bahamas is an observer in the WTO and is not a party to the agreement on Trade Related Investment Measures (TRIMS). It has signed the Economic Partnership Agreement (EPA) with the countries of the Caribbean Forum of African, Caribbean, and Pacific (ACP) States (CARIFORUM) and the European Union (EU). GCOB officials have informed the Embassy that the Government is actively involved in developing measures to implement the terms of the EPA that will include measures exceeding the WTO/TRIMS obligations.
Investment Incentives
Tax relief is the most significant investment incentive in The Bahamas. Currently the government does not impose taxes on income, estates, or inheritances in the country, but instead raises revenue from real property tax, import duties, value added tax, and various permit and license fees. Other incentives for investment include waivers on import duties, property tax abatement, and, in some cases, land grants and extended leases for private development.
These taxes are even further reduced for investments in selected ‘Family Islands’ and in the Freeport special economic zone which is privately owned and managed by the Grand Bahama Port Authority. (www.gbpa.org). While the terms of the overarching agreement for Freeport guarantee that the special economic zone can continue in existence until 2054, certain provisions of the agreement relating to business licensing and property tax have more limited terms and, as of March 2016, are under review during short term extensions. In the case of economically depressed family islands and those recently impacted by Hurricane Joaquin (2015), the Government maintains duty free concessions for building materials and other inputs.
Industry and region-specific incentives are offered to any qualifying individual and available under various laws. Further information on this legislation is available at http://www.bahamas.gov.bs.
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Research and Development
Foreign firms are not restricted from participating in government subsidized research and development programs.
Performance Requirements
The Bahamas maintains formal performance requirements for investments, including proof of adequate and legitimate sources of funding and economic and environmental impact assessments. Such requirements are negotiated on a project-by-project basis, and, particularly in the case of larger developments, are written into “heads of agreement,” between the government and the investor. It is noteworthy that these agreements also include government obligations to the investor.
There is no policy of forced localization or a requirement for technology transfers, but there is official encouragement to direct benefits to local producers and the transfer of skills to the local labor market. This engagement is a part of the negotiations with the Government and it is not uncommon for an investor to gain greater concessions where there is a direct benefit to local business, job creation, or an investment that supports the transfer of skills and technology.
Work permits are facilitated for key foreign employees as part of the investment approval process, but government policy generally favors the employment of Bahamian nationals. Fees for work permits are not tied to administrative costs and have been developed as a revenue measure and, depending on the category of employee, can cost up to USD 12,500 annually. Work permits for less senior employees and those without specialized skills are generally more difficult to obtain. According to Government officials, The Bahamas currently has 24,000 work permit holders, with a large majority considered as unskilled. Growing unemployment, however, makes it increasingly difficult to get a work permit and new approvals are subject to an extensive and potentially lengthy review process. Most permits are issued by the Immigration Board, but in high profile or sensitive positions Cabinet approval may be required.
Data Storage
There is no requirement for access to source codes, or a requirement for local data storage. There are a growing number of data storage facilities in The Bahamas and new entrants are offering services to both regional and international companies.